Trade, foreign policy, diplomacy and health

1. Global Public Goods and Health: concepts and issues

David Woodward, Richard D Smith

Financing GPGH: who pays?

  • International agencies?
  • National governements?
  • Transnational corporations?
Develpoed country governements are the major prospective source of financing for GPGs, directly or through international institutions.

Nationally, public goods are dealt with by government intervention, through direct provision, taxes, subsidies or regulation.
However, in the case of GPGs the absence of a ‘global government’ means that the collective action problem becomes more complex, with the increased number of players involved and the absence of effective, collectively-enforced sanctions against non-compliance.
The main potential contributors to the financing of GPGs are:
1. international agencies, as for consensus-building and collective decision-making, co-ordinators, promoters and channels of government support and supporters of control mechanisms and regulatory frameworks. However, while international agencies may provide a politically convenient means of channelling government support, they are financed and controlled (in varying ways) by their member governments, limiting their relevance as an independent source of financing;
2. national governments, as potential beneficiaries, sources of funding (internally and externally) and providers of mechanisms for control. However, most developing country governments, though major potential beneficiaries of most prospective GPGs, have very limited resources to contribute to their financing, whether directly or through international agencies. Their resources, in general, are also inversely proportional to their likely benefits, as richer countries generally have fewer health problems than poorer ones;
3. transnational corporations, as developers and suppliers of relevant technologies. However, they are primarily motivated by profit, and will generally make contributions only to the extent that they expect to benefit (although this would include perceived improvements in their public image, as well as more direct financial benefits), unless they can be effectively coerced.
All of this suggests that developed country governments are the major prospective source of financing for GPGs, either directly or through international institutions.